Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message| ()  

Executives

Don McCauley – CFO

Philippe Courtot – Chairman and CEO

Analysts

Sterling Auty – J.P. Morgan

Sitikantha Panigrahi – Credit Suisse

Robert Berza – RBC Capital

Rob Owen – Pacific Crest

Steve Ashley – Robert W. Baird

Erik Suppiger – JMP Securities

Joel Fishbein – Lazard Capital

Craig Nankervis – First Analysis

Qualys, Inc. (QLYS) Q3 2012 Earnings Call November 5, 2012 5:00 PM ET

Operator

Good day ladies and gentlemen and welcome to the Qualys Incorporated third quarter earnings call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. If anyone should require audio assistance during the conference please press star then zero to reach an operator.

I would now like to turn the call over to Don McCauley, CFO of Qualys. Please go ahead sir.

Don McCauley

It’s okay, thank you. And welcome to the Qualys third quarter 2012 investor call. As she just said I’m Don McCauley the CFO of Qualys. We are very pleased that you could join us today for our first call as a publicly traded company. Joining me on the call today is Phillip Courtot, our Chairman and CEO.

This is the first step in what we hope will be a regular and active dialogue with the investment community as you follow our story and learn more about the bright future that lies ahead for Qualys. Before we get started we would like to remind you that our presentation today contains forward-looking-statements within the meaning of the federal securities laws.

Forward-looking-statements in this presentation include but are not limited to statements related to our business and financial performance and expectations for future periods. Our expectations regarding the growth of the market for security and vulnerability management solutions, our expectations regarding the introduction of new solutions and enhancements to existing solutions and to our expectations regarding customer adoption of our solution.

Our expectations and beliefs regarding these matters may not materialize and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include those set forth in the press release we issues earlier today as well as those more fully described in our filings with the Securities and Exchange Commission.

The forward-looking-statements in this presentation are based on information available to us as of now and we disclaim any obligation to update any forward-looking statements except as required by law. We also remind you that this call will include a discussion of GAAP and non-GAAP financial measures. The non-GAAP financial measures are not intended to be considered in isolation or as a substitute for the results prepared in accordance with GAAP.

Discussion of why we present non-GAAP financial measures and a reconciliation of the non-GAAP financial measures discussed in this call to the most directly compared GAAP financial measures are included in our earnings press release that is available on our website.

For those of you new to the Qualys story, Philippe will provide you with a brief overview of our company and then discuss the company’s performance for the quarter. Then I will cover the financials and the factors that drove the third quarter in more detail and also lead a discussion of our outlook for the balance of the year. Finally we’ll open the call up for your questions. With that, I’d like to turn it over to Philippe Courtot.

Philippe Courtot

Thank you Don and welcome to your or to our first earning conference call as a public company. We have very good results to share with you as we continue to make substantial progress in all aspects of our business. We spoke with many of you during our IPO road show and you heard, first we heard about the large market and growth opportunity Qualys is well positioned to capture.

For those of you just joining us today, let me take a few minutes to tell you a little bit about us and why we believe our cloud security platform and suite of solutions as well as our business model set us apart in the market and will enable us to deliver solid growth for years to come. Cloud computing and mobility are changing businesses all around the world and our daily lives. And security has become front and center in this new computing era.

Security breaches are escalating and can be devastating for organizations of all sizes. Now more than ever CIO’s need to constantly make sure that vulnerabilities within their IT infrastructure are discovered on a continuous basis and addressed. And then must verify that vulnerabilities have been effectively alleviated or mitigated. In a response to such IT risks, today’s regulatory environment has extended and created a slew of new compliance obligations for companies across all sectors.

CEO’s and their boards are now asking CIO’s are we secure and are compliant. Qualys answers those questions with the cloud platform and a suite of solutions that allows enterprises to have the view of their security and compliance postures on a global scale. Security has become a problem of scale as securing the perimeter and a few critical server is now inadequate. Qualys’ cloud platform approach helps organizations solve scalability problems as they are now relieved from deploying traditional enterprise solutions that are difficult to deploy and costly to maintain.

With our cloud platform we provide our customers with the continuous view of their assets. We identify the vulnerabilities on those assets and prioritize and audit their (inaudible) in a highly automated way thus making such a complex task easier and cost effective when compared to traditional on premise enterprise software. We were the pioneers of this approach and have become a leader in cloud security and compliance because we made our solution powerful yet easy to use and simple to deploy.

To further expand our market reach, three years ago we re-architected our entire cloud software backend and delivery infrastructure to make it more expansible and to enable global reach. Now we have the robust core services foundation from which we have developed a slew of scalable modular and expansible security and compliance applications. We have now moved well beyond vulnerability management with our policy compliance and web application scanning solution which are being adopted by our customers at a rapid pace.

We have established a significant (inaudible) with more than 6,000 customers over 100 countries and have achieved over 87 million in LTM revenues. Importantly and unlike most of our competitors, these are pure clients revenues meaning no professional services or other non-recurring items. And we have been netting comfortable since 2009.

With the security and very limited market segment set to grow by 16% (inaudible) to almost $10 billion by 2015 opportunities more appealing that we are growing faster than the market today as to 20% year-over-year. We can also see further growth ahead with the delivery of traditional services replacing traditional enterprise found solutions that have become clearly inadequate. We call this the platform effect as we are starting to see existing customers adapting cloud solutions.

Be it selling point into our Qualys is significant at 80% about 6,000 customers have deployed only one solution and our suite today. That is one of the most exciting aspects of our story. We’re continuing our investments to further expand the capabilities and reach of our platform. We’ve introduced a cloud-based web application firewall uplink which is now in Beta and we are working on adding big data capabilities to our core services as well as an innovative solution for mobile devices.

As we continue to expand our reach beyond our corporate ability management business, while building a bigger opportunity for our investors and ourselves. This platform approach has enabled us to be in the highly leveraged business model with multiple growth drivers that in fact build on to one another. We have seen a clear inflection point in our revenue growth since 2010 and we believe our model will drive growth in the years to come as we continue to acquire new customers and then spreading these new customers on new solutions that will continue to build and deliver on our cloud platform.

For more and how this strategy grows our strong third quarter results, I’d like now to turn the call up to Don.

Don McCauley

Okay thanks Philippe. We’re very pleased with our third quarter performance as we executed on the fundamentals that Philippe just mentioned and we delivered on our key financial and operating metrics. Beginning with the top line, we drove revenue growth to 21%, of 21% to $23.4 million versus the same quarter last year. For the nine months ended September 30th, revenues are up 20% year-over-year and US revenues made up 68% of those revenues, up slightly from the 67% share at the six months ended June 30th and also for the year 2011.

Looking at our product mix, we continue to see growth rates of approximately 15% for our vulnerability management solution and 50+% for our newest solutions policy compliance and we applications scanning. In addition, we derived 87% of our year-to-date revenues from subscriptions to our VM solution down from 90% in the same period last year further highlighting the increasing customer adoption of the additional solutions.

We also saw continuing strong momentum in our key financial metrics four quarter bookings which for the most recent four quarter period was up 25% over the four quarter period ending September 30th last year. We calculate four quarter bookings as revenues for the preceding four quarters plus the change in current deferred revenues over the same period. Since we are in a one year subscription business, we use the current portion of deferred revenues to focus on the next one year revenue value of our subscriptions.

And this metric fully reflects our current business because it includes sales of subscriptions to new customers as well as renewals and upsells to existing customers. I would like to point out that there is approximately $2 million of inflation in current deferred revenues which will continue until Q1 of next year. This relates to a number of legacy monthly billing accounts that a partner switched to annual billing back in Q1 of this year.

Now this of course is a very good thing for our business but since this was a continuing revenue stream already in place, the increase in current deferred revenues related to the incremental annual billing as about 2% to this metric at this point.

So the third of 2012 GAAP gross profit increased to $18.7 million, a 16% increase over the same period last year and non-GAAP gross profit increased to $18.8 million also a 16% increase over the same period last year. Non-GAAP gross margin was 80% for the third quarter of 2012 compared to 84% during the same period last year. The decrease in both GAAP and non-GAAP gross margins was related to increased investments we made to expand our data center infrastructure and add capacity to deploy new solutions on our cloud platform. I’ll come at more on these investments when we discuss the balance sheet.

A key differentiator for Qualys is that we generate positive and growing operating income, net income, adjusted EBITDA and cash flows. These numbers are all detailed in the financial schedules and reconciliations in today’s press release. So I won’t go through each of them now. We do consider adjusted EBITDA to be a key metric for our business and so I would like to point out that adjusted EBITDA for the third quarter came in at $4.6 million, an increase of $1.8 million or 66% over last year’s Q3.

As a percentage of revenue, adjusted EBITDA increased from 14% of revenues in Q3 of last year to now 20% of revenues for Q3 this year. And we achieve these impressive adjusted EBITDA results while still making strategic investments in the business. These factors contributed to third quarter GAAP EPS of $0.06 per diluted share versus $0.02 per diluted share in the same quarter last year.

Third quarter non-GAAP EPS came in at $0.10 per diluted share compared to $0.04 per diluted share in the same period last year. The key driver of EPS growth was the increase in GAAP net income from $0.5 million in last year’s third quarter to $1.7 million this year. And non-GAAP income increased impressively also, going from $1.0 million to $2.7 million in this year’s third quarter.

Just a few comments on the balance sheet. As you know we have a very clean and well capitalized balance sheet with virtually no debt and more than $100 million in cash. Our cash position stood at $25.8 million at September 30th and of course after the end of the quarter we received the net proceeds from our IPO of $87.5 million which will only be reflected on our cash position the next time we report to you after Q4.

As we discuss in our IPO investor meetings, CapEx is an important element of investment in the growth of our business and we told investors to expect Qualys to invest approximately $3 million per quarter in CapEx for the next couple of years. The Q3 CapEx came in at $2.1 million but we are still expecting to average about $3 million per quarter. Now turning to our outlook for the fourth quarter and full year 2012 revenues are expected to be in the range of $24.0 million to $24.6 million for the fourth quarter of 2012.

And in the range of $90.8 million to $91.4 million for the full year. For the fourth quarter, GAAP EPS is expected to be I the range of $0.00 per share to $0.02 per share, and non-GAAP EPS is expected to be in the range of $0.03 to $0.05 cents. Both of these are based on approximately $35.2 million weighted, averaged diluted shares outstanding. For the full year, GAAP EPS is expected to be in the range of $0.04 to $0.06 and non-GAAP EPS is expected to be in the range of $0.17 to $0.19. These both based on approximately $28.4 million weighted average diluted shares outstanding.

We are very excited about the future and confident in our prospects. Qualys is a pioneer and leader in could security and compliance solutions, competing in a rapidly expanding market place with multiple long-term growth drives including significant upsell opportunities. Our platform is scalable and extensible. Capable of serving organizations of all sizes with our integrated suite of cloud security solutions. And as you know, our attractive SAS financial model has significant operating leverage opportunities and that we expect to drive strong results for years to come.

With that Philippe and I will be happy to answer any questions that you might have. Operator?

Question-and-Answer Session

Operator

(Operator Instructions) The first question comes from Sterling Auty from J.P. Morgan.

Sterling Auty – J.P. Morgan

Yeah thanks, hi guys? Just a couple of questions, the first one is can you talk a little bit about whether – how your new customer acquisition momentum was versus sales to existing customers.

Don McCauley

Yeah Sterling this is Don. We continue to have a good balance to results here. We had very good on both fronts and pipelines are looking the same way. So really we continue the same momentum we had earlier in the year and it’s continuing nicely.

Sterling Auty – J.P. Morgan

And then how about in terms of you talk about 50% + growth in terms of new value and solutions. How is it that when you look at cost then, any particular standouts in terms of within the product portfolio?

Don McCauley

Well you know the two we pointed out were policy compliance and web application scanning. They’ve both been very strong. I think this year we’ve seen a real acceleration in web applications scanning with our new version that came out this year and that’s a pretty unique solution in the market place and we’re seeing excellent growth in both but I think we’ve even seen more acceleration of web application scanning.

Philippe Courtot

Yeah I’m just – [cross talk]

Sterling Auty – J.P. Morgan

Okay my other question – oops sorry go ahead.

Philippe Courtot

I was just saying in just a while we are considering enhancing these products as well. So tremendous a reception from our customer and both and existing customer and new customers. We are enhancing them, investing more in them and these are already winners.

Sterling Auty – J.P. Morgan

No it’s great. And then just the last question, when you take a look at the new customers that are coming in is there any change in terms of what they are choosing as the first product to come in with or any change in terms of are they coming in by multiple products at once or still kind of are laying the next stand type of strategy?

Don McCauley

Yes, so we definitely have a land and expand strategy. Three years ago we would have said every customer came in and bought VM and that was the landing point and then we expanded from there. We continue to see and on increasing basis although it’s not a majority yet but an increasing basis of customers coming in buying we application scanning as their entrée to the suite. And as far as, one other point I’d just like to make for those who don’t know this, even though we have a suite, we still look to serve the initial buyer who comes to us on whichever solution that they came in like web application scanning.

And the land and expand strategy in our mind means, let’s take care of that first buyer, get him signed up to a contract, take care of that initial need, get them up and running solving the problem that they came to us with and worry about selling the rest of the suite later. So we don’t make an attempt to bog down the transaction and sell the whole suite upfront. Very, very few customers would come to us with that initial requirement.

Sterling Auty – J.P. Morgan

Got it thank you.

Operator

The next question comes from Phil Winslow form Credit Suisse.

Sitikantha Panigrahi – Credit Suisse

Hi guys, this is Siti Panigrahi for Phil Winslow. Just wondering, could you share any customer feedback from the web application for kind of any Beta customer that you have.

Philippe Courtot

It’s actually, it’s extremely well received for two reasons. The first one is that with the current solutions customers have a hard time to identify all of their web applications. Web applications have become the, an entry point for hackers into your network and so knowing how many applications you have and where they are is important. So what Qualys offers is the ability to identify and catalogue all the web applications and we do that extremely well. And the second is instead of having now to scan to identify vulnerabilities on a few critical web applications, you have to do that on many more and that’s where the scale comes in.

And that’s the driver of adoption for our market place. So we replaced a lot of these traditional tools which requires an engineer either to go as a security expert to user tool to identify vulnerabilities as we bring significantly more (inaudible). So we had the very good adoption. Large corporations for example placing orders for more than a 1,000 web applications and that’s again underscores the scale and the quality of detection that we bring.

Sitikantha Panigrahi – Credit Suisse

Alright, thanks then.

Operator

The next question comes from Robert Berza from RBC Capital.

Robert Berza – RBC Capital

Hi and thanks for taking my question. Philippe maybe you could talk a little bit about the web application appliance that you have on Beta. How do you see this kind of competing against other solutions in the market and when do you think it will be generally available? Thanks.

Philippe Courtot

This is the web application firewall that we mentioned where the web application standing is already in production and going very well. We look at web application as a whole. For us the web application firewall is a component thus ensuring that you secure your web application. In that case this is a mitigation of components. So we identified your web application, we catalogued them, we identified the vulnerabilities and then we firewalled, well we mitigate then until you have been able to remediate.

So this is a very key component to what makes us unique here. Is that we can bring all of the information that we gather from the web application scanning so we could create better rules and more adequate rules for this web application. So our products are a cloud based approach. It takes time to build the infrastructure which we are building. It also takes time to mature so if you’re (inaudible) the applications.

We are just at the very beginning. We’re also working at adding other components. It should be referred to that web application element and to provide a full solution for your web application. So you’re going to see more announcements during next year. I think we have a very good solution here. It will be too soon to predict its success but we have a lot of customers interested and we’ll do like we have done with all of our other solutions, bring scalability and quality and full integration with our suite of applications.

Robert Berza – RBC Capital

Thanks.

Operator

The next question comes from Rob Owen from Pacific Crest.

Rob Owen – Pacific Crest

(inaudible) and good afternoon? Could you give us an indication of large deals in the quarter and or what an average deal size looks like in the quarter for you?

Don McCauley

Yeah so hi Rob, this is Don. We typically don’t talk about the size of individual large deals. Our average deal size continues to be in the range of around $75,000 for enterprise deals and about 10% of that on the SMB side. That’s been pretty consistent over the last couple of years. And we generally don’t comment on individual deals at this point.

Rob Owen – Pacific Crest

Okay fair enough. And then Don, on the sales and marketing line it seemed be lighter than we were looking for and down sequentially. Was there anything one time in nature in the quarter, did you slow hiring and how should we expect that to weigh up moving forward.

Don McCauley

Yeah so your question is on the sales and marketing expense line, correct?

Rob Owen – Pacific Crest

Yes.

Don McCauley

This is quite a fight, yeah okay. Q2 is the big quarter here for our big RSA, InfoSec and many other regional marketing shows. That spring season is a very big one. So Q2 has a lot of marketing and sales expenses in it and more travel as well. Q3, it’s a lot slower in a lot of parts of this world especially Europe obviously. So it’s more that Q2 is heavy. As far as hiring we’ve been, year-to-date we’ve been increasing the size of the sales force.

It stayed about the same size net in Q3. We’ve done a lot of recruiting in mid and towards the end of Q3 but those hires are now showing up in Q4. So we did not have an increase in that spending in Q3 to offset the decrease in trade shows and just the stuff like that.

Rob Owen – Pacific Crest

Great and one more criticism I was going to make. Just the accounts payable I think jumped at a little over $5 million sequentially, deferred was up a little bit just $3 million sequentially. Was it a back and win quarter, was there some linearity there?

Don McCauley

Well to be fair, some of it was back end weighted Rob but we also we came to the realization that we didn’t have our eye on that ball as well as we should. We actually added another person to our staff to focus on that a little more. Most of my accounting staff was focused on the S1, the IPO process. And it’s not a huge problem but you’re exactly right and we look to bring that down in our next quarter. As I said we added a small resource to follow up.

Rob Owen – Pacific Crest

Great, thanks Don thanks guys.

Don McCauley

You’re welcome.

Operator

The next question comes from Steve Ashley with Robert W. Baird.

Steve Ashley – Robert W. Baird

Hey thanks. Just wondering if you could maybe comment on the renewal rates that are seeing in the business.

Don McCauley

Yeah so, Steve we continue and the real rates haven’t changed. We continue to see really high renewal rates on the enterprise side, 95 or better but 10 points lower than the SMB side for pure renewal rates. So and pretty, pretty consistent to what we’ve done in the past. However we haven’t seen any real change going on there.

Steve Ashley – Robert W. Baird

Does FX have any impact on your reported international revenue?

Don McCauley

It does, over time it does. We hedge our FX every month to protect what we built. We protect our cash and receivables position every month in the Euro for example. But over time it does. If a subscription that’s denominated in Euros was €100 last year and €100 this year, on its renewal date it gets translated to one of our many dollars that it’s worth. So yes on an annual rolling basis there is an impact there. And it goes both with directions obviously.

Steve Ashley – Robert W. Baird

And then lastly, Philippe you mentioned about looking out that maybe big data and mobile devices would offer some opportunity. I wonder if you could give us a little more color on what kind of security opportunities there are on those big trends.

Philippe Courtot

Very good question. If you look at security I mentioned earlier in my introduction speech the notion of scale. So if security has become a problem at the scale then it has also become what I will add, a promised real-time. So you’ve got to capture and correlate information and the challenge is that you’ve got a lot of data but you have to do that in real-time. Unless you do forensic, it’s forensic then you’ve time if you preferred to analyze the patient what happened after he said that if you want to really protect you need to have real-time and thus present a huge technical challenge to build a back end which can correlate information in what we call semi real-time.

We already have done that with our asset management solution, our asset tagging solution as we call it where we can essentially manipulate millions of assets in real-time in milliseconds. So we are all building, as we mentioned we are investing big time and further expanding the capabilities of our backend and so we could add real-time big data capabilities for correlation. And this is also going to be extremely useful for mobile devices as you have to essentially build a solution that scales for hundreds of millions of devices and that’s just not for the10,000 or 100,000 of mobile devices that one company may have. So that’s part of expanding our infrastructure.

We’re making very good progress at this in fact we’re extremely strong enduring team. So you’re going to see some of that sometime next year I cannot give time and commitment at this time but we’re really working and investing big time there.

Steve Ashley – Robert W. Baird

Thank you.

Operator

The next question comes from Erik Suppiger from JMP Securities.

Erik Suppiger – JMP Securities

Good afternoon? First off any comments about Europe, how did Europe perform relative to expectations given this modest shift towards North America?

Philippe Courtot

We have seen like almost everybody the slowdown in Europe. It is a combination of the typical but third quarter is never very strong. But the uncertainties that we all know in Europe, the budget pressure has really showed that the business – slowdown in the business. Conversely we have seen a very strong momentum in both the US and as well as Latin America and Canada and Asia-Pac.

Erik Suppiger – JMP Securities

Okay. Can you give us any, even a qualitative sense for what your exposure is between AMIA and Asia-Pacific?

Don McCauley

Yeah Erik. We have about I think about 14% or 15% of our business is in the Euro –

Erik Suppiger – JMP Securities

Okay.

Don McCauley

And our total international business is about 26%, something like that, close to that. See it’s now spread between the Pound, the Yen mostly.

Erik Suppiger – JMP Securities

Okay. Total currency, because you had said that US was, or North America I think was 68% of revenue?

Don McCauley

Right, right okay.

Erik Suppiger – JMP Securities

Your foreign currencies are 26% of that, correct?

Don McCauley

Right, yeah some foreign – we have to bill in dollars for some international stuff. So I think the foreign currency piece is more like around 25%/26% something like that.

Erik Suppiger – JMP Securities

Okay. As we start looking into Q4 on the bookings and even Q1 is there any reason we might expect different seasonality’s than what you would have seen a year ago or should we just work from the fourth quarter bookings perspective that would maintain a fairly consistent growth from quarter to quarter?

Don McCauley

Right, for those who are new to this part of the story quarterly sales have an established seasonality which ties in in the corporate buying pattern of our new price customers. Where Q1 and Q2 of the smaller quarters for bookings picks up in Q3 and then Q4 is the largest quarter of the year. I have nothing to suggest that that pattern won’t continue for like the 10th consecutive year Erik. That’s one of the reasons forward quarter bookings is a very good metric because it always gives you the full year view and takes all of that into account so we don’t – those swings don’t affect revenue nearly as much as obviously they affect what we bill in book.

Erik Suppiger – JMP Securities

Okay. And then lastly just on the web apps scanning you’ve said that was strong. You’ve said that that was or your newer products did 50% more growth. Can we assume that the growth in web apps scanning has sustained or even accelerated from what you’ve seen in previous quarters?

Don McCauley

I think that’s what I said. We’ve seen, they’re both doing really well and we’ve actually seen good acceleration in web app scanning which I think is also specifically tied to the market need in general but Philippe mentioned we continue to improve. I mentioned it was a new version in broader scope. Philippe mentioned we are constantly improving these products. We listen to our customers and keep improving them and features and as we do that the product becomes more suitable for more and more customers and we’re definitely seeing that.

Philippe Courtot

Yeah and I should add then that thanks to our self-model which has a development cycle that’s significantly shorter than enterprise software solutions. We are also keeping continuously improving certain pretty fast pace of improvement and which our customers appreciate. So we can really answer back to the needs of our customers, change things, improve the quality of the scanning et cetera, et cetera.

Erik Suppiger – JMP Securities

Very good, thank you.

Operator

The next question comes from Joel Fishbein from Lazard.

Joel Fishbein – Lazard Capital

Just a quick question down on the margins. You had a really nice job on the EBITDA margin side. Is this the new baseline or just some seasonality there? Any color there would be very helpful.

Don McCauley

It jumped to 20% in Q3. I think that brings year-to-date up to 14%, something like that. I think the year-to-date is a better way to think about it. Again, Q2, heavy marketing expenses, Q3, light marketing expenses. So I think Q3 is by itself a little bit getting ahead of the curve because it has very light on those expenses that came up in the normal questions.

Joel Fishbein – Lazard Capital

Alright thank you.

Operator

The next question comes from Craig Nankervis from First Analysis.

Craig Nankervis – First Analysis

Thanks nice quarter. I wonder if you can comment at this or any flavor on SMB progress. How your strategy to more exploit the opportunity at the lower end of the market is going along.

Philippe Courtot

Okay very good. So we are in fact in on now with the re-architecting of our backend as we mentioned. That allows us to simplify. In fact you come with the UI more specific to the SMB and also a platform from which we can. We are going to in fact announce quite a large number of lead generations, trials which are pretty easy for people to have immediate instant gratifications. So you are going to receive in the month to come major lead generation campaigns on the SMB firms. We at the platform we’re just packaging all of that so it’s just a question of doing it. So we have everything we need.

Craig Nankervis – First Analysis

So is there any update on your channel activity especially in the newer channels consulting firms, hosting providers. How far along are you in to breaking into those new channel opportunities?

Philippe Courtot

So though we’re doing very well, we are continuing expanding our business with existing partners such as Dell Secure Works, we’re doing very well with that event and many others. And we’re also globally. We’ve expanded our relationship with Wipro and many others and continuing the expansion. We are in fact looking to expand our channel junior partner team so we could essentially grow our business more with partners which represent about 41% of our business now to date. So we are continuing in very solid performance from our channels.

Craig Nankervis – First Analysis

And lastly, have there been any changes in your investment plans in terms of the timetables. Have you seen anything that causes you to accelerate your investment or conversely slightly throttle it back or it pretty much unchanged?

Philippe Courtot

That is pretty much unchanged I think we’re pretty much on plan and continuing to do the same. But we’ll be looking at potentially some licensing of technologies or making maybe small acquisitions if that can accelerate our product, delivering new services to the market. As we mentioned during the roadshow we are doing that very carefully.

Craig Nankervis – First Analysis

Thank you that does it for me.

Philippe Courtot

Okay, thank you.

Operator

At this time I am showing no further questions. I would now like to turn the call back over to management.

Philippe Courtot

Okay, so thank you very much and should you have any follow up question Don and we are always available like any good sales company 24X7. And otherwise we look forward to speaking with you our next quarter call. Thank you.

Don McCauley

Thank you, bye bye.

Operator

Ladies and gentlemen that does conclude the conference for today. Again thank you for your participation, you may all disconnect. Have a good day.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Qualys' CEO Discusses Q3 2012 Results - Earnings Call Transcript
This Transcript
All Transcripts